The Reserve Bank of India on September 6, 2013 released a Press Notice, stating that it has cancelled the licence of Kasundia Co-operative Bank Ltd. Howrah (West Bengal) as it had ceased to be solvent and the depositors were being inconvenienced by the continued uncertainty.

The Registrar of co-operative Societies, West Bengal State has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

Eligible depositors will get the amount insured as per the Deposit Insurance and Credit Guarantee Corporation Act, 1961.

It may be noted that upon liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 1,00,000/- (Rupees One lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions.

The Bank commenced business in 1986, and with a very short span i.e by 2002, the rot had set in.

The last straw was in July 2012, when the bank faced severe liquidity crunch. The bank had stopped cash payments completely and returned most of the outward clearing instruments due to shortage of funds with clearing banker.

As the chances of the Bank being revived were remote, continuation of the bank would have been against public interest. The Reserve Bank of India, therefore, cancelled the licence of the bank in the interest of bank’s depositors.